First publication: A week after the confrontation between the chairman of the Finance Committee, Hanoch Milwidsky, and the head of the Tnufa and Tkuma Directorate, Aviad Friedman, reached an explosion and led to a delay in transferring NIS 1.1 billion for the rehabilitation of the southern communities damaged on October 7, the Finance Committee approved the budget today, bringing the affair to an end.
The crisis began following Milwidsky's demand to receive budget utilization reports for the year 2026 from the Tnufa and Tkuma Directorate, with the aim of locating unutilized budgets and diverting approximately NIS 500 million for the benefit of businesses in the North, which are in a deep crisis after nearly three years of war. The committee claimed that the reports that were finally transferred were partial, and that specifically the main figure, the budget utilization percentages, was omitted from them.
For four consecutive hearings, Milwidsky demanded that government ministries present a solution for businesses in the North, especially in the tourism sector which suffered a severe blow and is still struggling to recover. For this purpose, he requested to receive the execution reports of the Tnufa Directorate, in order to examine if unutilized budgets exist that could be directed toward continuous damage grants for businesses.
According to the committee, even after repeated requests, the reports were not transferred. Only after Milwidsky delayed the budget transfer to the Tkuma Directorate were the 2025 documents sent first, and later also the 2026 report. However, according to the committee, in this report the column for budget utilization percentages was omitted, so that it was impossible to learn from it about the actual scope of execution.
On the other hand, the Tnufa and Tkuma Directorate claimed that the government's decision on the transfer of NIS 5.6 billion was made only on June 6, and the money was transferred to the directorate only last Wednesday. Therefore, it was not possible to present the execution of budgets that had not yet been received.
The deputy director-general of the Prime Minister's Office, Shir Rabinovich, confirmed the matters during the hearing and said that she and Friedman met last week on the issue, and an additional meeting will take place this coming Wednesday.
Nevertheless, the committee criticized the fact that even the execution report for the tens of millions of shekels already transferred last year was not fully presented.
Milwidsky explained during the hearing the background of his decision to delay the budget: "This is a request that I delayed until now for a very simple reason. We held several discussions here regarding the situation of businesses in the North. The fact that after three years routine has still not returned to the North indicates that there is a continuous blow here. But this continuous blow is not reflected in the treatment that businesses in the North receive and in the existing compensation mechanisms.
"The Property Tax Fund, by its nature, knows how to compensate for war damage day to day. But between operations, there are interim periods during which there is a wartime routine. Most of the businesses there depend on tourism, and the North simply did not pick itself up. Beyond all the data, anyone walking around the North sees it with their own eyes. We said that it might be possible to provide compensation in the format of a continuous damage grant.
"Week after week we held discussions here. In most of them, they did not even bother to send a representative. And even when they arrived, they mainly explained to us how wonderful what was done in the past was, but did not say a word about what is happening now and what they intend to do from here onward. There is quite a bit of money sitting in these directorates that was not utilized to the end, and certainly not in the year 2026. We asked to perform a diversion of unutilized funds for the benefit of the thing that is most needed now – the businesses in the North.
"To my great regret, two weeks have passed since then and there was not even one positive interaction from the directorate. We requested a budget utilization report, and until this moment we have not received it. This morning we received a budget utilization report for 2025. We also requested the 2026 report, and we were told that it is impossible to generate such a report. Finally, when the report arrived, they simply deleted the execution data from it. The column of utilization percentages they simply removed. This means that even now we do not really have a budget utilization report from which something can be learned."
According to him: "Because of this lack of cooperation, I was forced to delay a transfer that was actually intended for the South. I hoped that this delay would create forced cooperation, that it would start some process, some dialogue. But the only process that happened this week from the directorate's side was briefings. Suddenly I started receiving phone calls from heads of authorities in the South, residents from the Gaza envelope came to me claiming that I am blocking the rehabilitation and stopping the South. This is what they were engaged in – briefings to heads of authorities and to the press. This was a tactical step that I hoped would create forced cooperation and help find a solution."
As stated, at the conclusion of the hearing, after it was agreed to continue tracking the discovery of solutions for businesses in the North, the members of the Finance Committee unanimously approved the transfer of the NIS 1.1 billion to the Tkuma Directorate.